Canadians would throw a fit about it though. Government employees earning over 100K triggers a lot of people.
But if you refuse to have competitive wages, no competent software engineer will want to work in government. Then you get some contractor job from a consulting company and good luck with that: many are happy to send a handful of junior developrts to fill their multi million contracts, with their seniors hopping in just enough time to justify the billing.
Increased comp isn't to motivate current people. It is so you aren't only hiring people at the level of skill and motivation as the current people.